Texas Instruments Calculator User Manual page 54

Number of Months
9
2
10
If the required earnings rate is 10% per 12-month period with monthly
compounding:
• What is the present value of these lease payments?
• What even payment amount at the beginning of each month would
result in the same present value?
Because the cash flows are uneven, use the Cash Flow worksheet to
determine the net present value of the lease.
Computing NPV
The cash flows for the first four months are stated as a group of four $0
cash flows. Because the lease specifies beginning-of-period payments,
you must treat the first cash flow in this group as the initial investment
( ) and enter the remaining three cash flows on the cash flow screens
CFo
( and ).
C01 F01
Note: The BGN/END setting in the TVM worksheet does not affect the
Cash Flow worksheet.
To
Set all variables to defaults.
Select Cash Flow worksheet.
Enter first group of cash flows. #
Enter second group of cash
flows.
50
Payment Amount
$6000
$0
$7000
Press
& } !
'
# !
3
# S !
5000
# !
8
Display
RST
CFo=
C01=
0.00
F01=
3.00
C02= -5000.00
F02=
8.00
Cash Flow Worksheet
0.00
0.00
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